The Price is Right: Confirmation of a Red Bull US Price Increase is a Positive Short-Term, but Also Longer-Term for Sustained Category (and MNST) Growth

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The Price is Right: Confirmation of a Red Bull US Price Increase is a Positive Short-Term, but Also Longer-Term for Sustained Category (and MNST) Growth

g; (3) a lack of SG&A leverage with reinvestment to

support growth; and (4) episodic pricing that was more reactive after the fact to

commodity inflation than a sustained consistent proactive margin driver. Together,

these factors constrained historical EPS flow-through despite uniquely strong MNST

revenue growth. In 2026, we forecast 40 bps of margin compression with outsized

commodity pressure and negative geographic mix, and spending for digital

transformation initiatives.

Forward Margin Expansion Drivers: In contrast, looking forward, we see a number

of key and importantly sustainable forward margin expansion drivers that should

enable greater EPS growth flow-through from strong topline growth beginning in

2027, including: 1) increased pricing, with 4Q25 MNST pricing heralding a new era of

RGM-driven pricing that should yield both greater pricing consistency annually along

with low demand elasticity; 2) favorable product mix with a shift to higher margin

and lower cost zero-sugar products; 3) enhanced SG&A leverage as MNST focuses

on driving cost efficiencies and topline leverage ramps up with strong revenue

growth; 4) greater contribution from outsized growth in higher margin affordable

energy brands; and 5) improved supply chain efficiencies. Net, profit conversion is

now becoming more visible as revenue scales, with the business model now

operating with multiple enduring margin drivers that will shine through in 2027

after temporary 2026 pressure subsides. We also note a hypothetical alcohol

divestiture (given MNST already breaks out alcohol separately) would be margin